TEX reported that, for the purpose of implementing maintenance for facilities in October to December 2009 quarter, two major stainless steel companies in China, namely Taiyuan Iron & Steel and Baoshan Group, are entering into the structure to reduce their production of stainless steel. Therefore, the matter, which China intends to expand production of stainless steel, is coming to a standstill and nickel stocks in China are said to have an excess but supposed to increase further by this movement in production of stainless steel.

According to a survey report published by Goldman Sach in this week, nickel stocks in China as of August 31st 2009 are estimated at 139,000 tonnes and, in view of the fact that China is moving to produce nickel contained pig iron on full scale as its current price has turned to be profitable, a feeling of the excessively stocked nickel in China is anticipated to multiply.

It is certainly forecasted that China will produce more than 8 million tonnes of crude stainless steel in the calendar year of 2009, because China already produced 4.067 million tonnes in the first half of 2009. Owing to the overproduction in the first half, a tempo to increase the output of crude stainless steel in the second half of 2009 is supposed to slow down but the total quantity of crude stainless steel to be produced in China for the full year of 2009 is anticipated to be more than 8 million tonnes on an annualized base.

Meanwhile, the exports of nickel from Japan in the first half of 2009 were maintained on a favorable tone but, owing to the changed market situation of nickel in China where are an important country for Japan to export nickel, the exports in the second half are turning to be inevitable to decrease in comparison with those in the first half.

(Sourced from TEX Report Limited)